Berggruen Holdings invests Rs 200 crore more in Keys Hotels

Berggruen Holdings is owner of Berggruen Hotels in India, which was founded in September 2006 to build and operate business hotels under the Keys brand.Anumeha Chaturvedi | ET Bureau | May 29, 2017, 10:30 IST

Berggruen Holdings is owner of Berggruen Hotels in India, which was founded in September 2006 to build and operate business hotels under the Keys brand. Both Keys and Berggruen Holdings said the investment will be used to expand the brand on an asset light model, with more management and franchising agreements. Kabir Kewalramani, CEO, Berggruen Holdings, said, “We have had a same hotel sales growth of 23-27%, which is almost twice the growth rate the industry has achieved.

This has given us a lot of faith and confidence to back the management to try and get further scale of business. We have decided to increase our exposure in the business.” It operates hotels in categories of Keys Prima, an upscale brand; the signature Keys Hotels targeted at business and leisure travellers and Keys Lite, the value brand. The company owns, manages and franchises and has 21 operational hotels. After two years of growth, it plans to expand through eight to 12 new hotels this year.

Anshu Sarin, CEO, Keys Hotels said the company will use the funds to primarily expand through the signature brand. “Our focus is to work on technology and distribution, from a marketing standpoint. We are looking at options in the reservation or booking ecosystem which will allow upgrade, management of inventory, pricing management to become a lot more efficient. We are also working on our employee systems and how we leverage social media as well as technology.”

Berggruen Holdings had committed equity of around $80 million in September 2006 at launch. Kewalramani said the investments make Berggruen the single largest investor in the Indian hospitality space over past 10 years. “Our exposure is in excess of $100 million, well above of what we had committed. We are sole equity holders. We will be providing additional capital too,” he added. The numbers of rooms in Keys Hotels will go up to over 3,000 by end of this year, from 2,200 at present.